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Read the business case "Waste Management" posted in the module 2 content folder and answer the questions "If you were in charge of Waste Management, what would you do?".  What can the waste management company do to meet increased customers expectations, on one hand, while still finding a way to earn a profit on high-cost recycled materials?

Read the business case "Waste Management" posted in the module 2 content folder and answer the questions "If you were in charge of Waste Management, what would you do?".  What can the waste management company do to meet increased customers expectations, on one hand, while still finding a way to earn a profit on high-cost recycled materials?

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Read the business case "Waste Management" posted in the module 2 content folder and answer the questions "If you were in charge of Waste Management, what would you do?". 

What can the waste management company do to meet increased customers expectations, on one hand, while still finding a way to earn a profit on high-cost recycled materials?

 

 

Waste Management Headquarters, Houston, Texas largest retailer in the world, has also embraced this goal, stating, "Our vision is to reach a day where there are no dumpsters behind our stores and clubs, and no landfills containing our throwaways." Like those at Subaru and Walmart, corporate leaders worldwide are committed to reducing the waste produced by their companies. Because that represents a direct threat to Waste Management's landfill business, what can be done to take advantage of the trend toward zero waste while allowing the company to continue to grow Americans generate a quarter billion tons of trash a year, or 4.5 pounds of trash per person per day. Thanks to nearly 9,000 curbside recycling programs, a third of that is recycled. But, that still leaves 3 pounds of trash per person per day to be disposed. In the past, trash was incinerated, often in local neighborhoods. John Waffenschmidt, vice president for Covanta Energy Corp., remembers that when he delivered newspapers in the 1960s, “I'd go out in the morning and there would be little flakes coming down because there were 4,000 or 5,000 apartment- revenues? Another significant change for Waste Managemen is that not only are its customers reducing the waste they send to its landfills, they're also wanting what is sent to landfills to be sorted for recycling and reuse. For instance, food waste, yard clippings, and wood-al organic materials-account for roughly one-third of the material sent to landfills. Likewise, there's growing demand for waste companies to manage and recycle discarded TVs, computer monitors, and other electroni waste that leak lead, mercury, and hazardous materi- als when improperly disposed. However, the high cost of collecting and sorting recyclable materials means that Waste Management loses money when it recycles building incinerators." The rest was incinerated in large power plants, like the one on the east side of the Hudson River that burns 1,900 tons of New York City garbage each day. With 20 million customers; 273 municipal landfills; 91 recycling facilities; and 17 waste-to-energy facili- ties-that's what large power-generating incinerator plants are called today- Waste Management, Inc., is the largest waste-handling company in the world. It generates 75 percent of its profits from 273 landfills, which can hold 4.8 billion tons of trash. And because it only collects 110 million tons a year, it has plenty of landfill capacity for years to come. You joined the company a decade ago, and, after 3.5 short years as deputy general counsel and then chief financial officer, became CEO. That quick promo- them. What can the company do to meet increased customer expectations, on one hand, while still finding a way to earn a profit on high-cost recycled materials? Finally, advocacy groups, such as the Sierra Club, regularly protest Waste Management's landfill prac- tices, deeming them irresponsible and harmful to the tion prompted you to joke, "I needed to go to a book- store to see whether I could find a book called CEO-ing for Dummies." Instead, Waste Management sent you to
Transcribed Image Text:Waste Management Headquarters, Houston, Texas largest retailer in the world, has also embraced this goal, stating, "Our vision is to reach a day where there are no dumpsters behind our stores and clubs, and no landfills containing our throwaways." Like those at Subaru and Walmart, corporate leaders worldwide are committed to reducing the waste produced by their companies. Because that represents a direct threat to Waste Management's landfill business, what can be done to take advantage of the trend toward zero waste while allowing the company to continue to grow Americans generate a quarter billion tons of trash a year, or 4.5 pounds of trash per person per day. Thanks to nearly 9,000 curbside recycling programs, a third of that is recycled. But, that still leaves 3 pounds of trash per person per day to be disposed. In the past, trash was incinerated, often in local neighborhoods. John Waffenschmidt, vice president for Covanta Energy Corp., remembers that when he delivered newspapers in the 1960s, “I'd go out in the morning and there would be little flakes coming down because there were 4,000 or 5,000 apartment- revenues? Another significant change for Waste Managemen is that not only are its customers reducing the waste they send to its landfills, they're also wanting what is sent to landfills to be sorted for recycling and reuse. For instance, food waste, yard clippings, and wood-al organic materials-account for roughly one-third of the material sent to landfills. Likewise, there's growing demand for waste companies to manage and recycle discarded TVs, computer monitors, and other electroni waste that leak lead, mercury, and hazardous materi- als when improperly disposed. However, the high cost of collecting and sorting recyclable materials means that Waste Management loses money when it recycles building incinerators." The rest was incinerated in large power plants, like the one on the east side of the Hudson River that burns 1,900 tons of New York City garbage each day. With 20 million customers; 273 municipal landfills; 91 recycling facilities; and 17 waste-to-energy facili- ties-that's what large power-generating incinerator plants are called today- Waste Management, Inc., is the largest waste-handling company in the world. It generates 75 percent of its profits from 273 landfills, which can hold 4.8 billion tons of trash. And because it only collects 110 million tons a year, it has plenty of landfill capacity for years to come. You joined the company a decade ago, and, after 3.5 short years as deputy general counsel and then chief financial officer, became CEO. That quick promo- them. What can the company do to meet increased customer expectations, on one hand, while still finding a way to earn a profit on high-cost recycled materials? Finally, advocacy groups, such as the Sierra Club, regularly protest Waste Management's landfill prac- tices, deeming them irresponsible and harmful to the tion prompted you to joke, "I needed to go to a book- store to see whether I could find a book called CEO-ing for Dummies." Instead, Waste Management sent you to
store to see whether I could find a book called CEO-ing for Dummies." Instead, Waste Management sent you to Harvard for an executive program for CEOS, where the most important lesson you learned was to listen, be- cause, as you tell your executive team, "This company and this industry aren't very good at that." And with all of the changes taking place in your regularly protest Waste Management's landfill prac- tices, deeming them irresponsible and harmful to the environment. Should Waste Management take on its critics and fight back, or should it focus on its business and let the results speak for themselves? Should it view environmental advocates as a threat or an opportunity for the company? If you were in charge of Waste Management, what would you do? industry, Waste Management won't succeed unless it listens. However, corporations, cities, and households are greatly reducing the amount of waste they gener- ate, and thus the amount of trash that they pay Waste Sources: "2010 Sustainability Report,"Waste Management, www.wm.com/sustainability/pdfs/2010_ Sustainability_Report.pdf, (accessed 6 February 2011); "Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts and Figures for 2008,"U.S. Environmental Protection Agency, Management to haul away to its landfills. Subaru of America, for instance, has a zero-landfill plant in West Lafayette, Indiana, that hasn't sent any waste to a landfill since 2004. None! And Subaru isn't exceptional in seeking to be a zero-landfill company. Walmart, the http://www.epa.gov/epawaste/nonhaz/municipal/pubs/msw2008rpt.pdf, (accessed 14 February 2011); "Zero Waste,"Wal-Mart*Corporate, http://walmartstores.com/Sustainability/7762.aspx (accessed 15 February 2011); J. Ball, "Currents-Power Shift: Climate Change: Garbage Gets Fresh Look as Source of Energy," Wall Street Joumal, 15 May 2009, A9; J. Fahey, "Waste Not," Forbes Asia, July 2010, 46; M. Gunther, "Waste Management's New Direction," Fortune 6 December 2010, 103–108; A. Robinson & D. Schroeder, "Greener and Cheaper: The conventional wisdom is that a company's costs rise as its environmental impact falls; Think again." The Wall Street Journal, 23 March 2009, R4.
Transcribed Image Text:store to see whether I could find a book called CEO-ing for Dummies." Instead, Waste Management sent you to Harvard for an executive program for CEOS, where the most important lesson you learned was to listen, be- cause, as you tell your executive team, "This company and this industry aren't very good at that." And with all of the changes taking place in your regularly protest Waste Management's landfill prac- tices, deeming them irresponsible and harmful to the environment. Should Waste Management take on its critics and fight back, or should it focus on its business and let the results speak for themselves? Should it view environmental advocates as a threat or an opportunity for the company? If you were in charge of Waste Management, what would you do? industry, Waste Management won't succeed unless it listens. However, corporations, cities, and households are greatly reducing the amount of waste they gener- ate, and thus the amount of trash that they pay Waste Sources: "2010 Sustainability Report,"Waste Management, www.wm.com/sustainability/pdfs/2010_ Sustainability_Report.pdf, (accessed 6 February 2011); "Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts and Figures for 2008,"U.S. Environmental Protection Agency, Management to haul away to its landfills. Subaru of America, for instance, has a zero-landfill plant in West Lafayette, Indiana, that hasn't sent any waste to a landfill since 2004. None! And Subaru isn't exceptional in seeking to be a zero-landfill company. Walmart, the http://www.epa.gov/epawaste/nonhaz/municipal/pubs/msw2008rpt.pdf, (accessed 14 February 2011); "Zero Waste,"Wal-Mart*Corporate, http://walmartstores.com/Sustainability/7762.aspx (accessed 15 February 2011); J. Ball, "Currents-Power Shift: Climate Change: Garbage Gets Fresh Look as Source of Energy," Wall Street Joumal, 15 May 2009, A9; J. Fahey, "Waste Not," Forbes Asia, July 2010, 46; M. Gunther, "Waste Management's New Direction," Fortune 6 December 2010, 103–108; A. Robinson & D. Schroeder, "Greener and Cheaper: The conventional wisdom is that a company's costs rise as its environmental impact falls; Think again." The Wall Street Journal, 23 March 2009, R4.
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